Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Timing and quantifying rules - Matching rules: revenue account property, prepayments, and deferred payments

EA 1: Trading stock, livestock, and excepted financial arrangements

You could also call this:

“Rules for valuing specific property types for tax purposes”

You need to know about some special rules for certain types of property. These rules apply to trading stock, livestock, and some financial arrangements.

If you have any of these types of property at the end of a tax year, their value counts as your income for that year. This is explained in [section CH 1].

If you have any of these types of property at the start of a tax year, you can claim their value as a deduction for that year. This is explained in [section DB 49].

The rules apply to:

  • Trading stock, which is valued as described in [subpart EB]
  • Livestock, which is valued as described in [subpart EC]
  • Certain financial arrangements that are valued as described in [subpart ED]
  • A special right related to shared financial arrangements

The exact values of these properties are determined using specific rules. For trading stock, you use [section EB 3]. For livestock, you use [section EC 2]. For the special financial arrangements, you use [section ED 1].

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514268.

Topics:
Money and consumer rights > Taxes
Previous

DZ 23: Aircraft maintenance: tax accounting provisions for expenditure incurred after 2016–17 income year, or

“Tax rules for aircraft maintenance expenses claimed before 2017”

Next

EA 2: Other revenue account property, or

“Rules for claiming costs when selling certain types of property for profit”

Part E Timing and quantifying rules
Matching rules: revenue account property, prepayments, and deferred payments

EA 1Trading stock, livestock, and excepted financial arrangements

  1. The matching rules described in this section apply to each of the following kinds of property:

  2. trading stock valued under subpart EB (Valuation of trading stock (including dealer’s livestock)):
    1. livestock valued under subpart EC (Valuation of livestock):
      1. excepted financial arrangements that are revenue account property valued under subpart ED (Valuation of excepted financial arrangements):
        1. a share supplier’s share-lending right, if the original shares that relate to the right are excepted financial arrangements described in paragraph (c).

          1. When a person has any of those kinds of property at the end of an income year, its value is income of the person in the income year under section CH 1 (Adjustment for closing values of trading stock, livestock, and excepted financial arrangements).

          2. When a person has any of those kinds of property at the start of an income year, they are allowed a deduction for its value in the income year under section DB 49 (Adjustment for opening values of trading stock, livestock, and excepted financial arrangements).

          3. The values are determined under—

          4. section EB 3 (Valuation of trading stock); and
            1. section EC 2 (Valuation of livestock); and
              1. section ED 1 (Valuation of excepted financial arrangements).

                Compare